Michael Keenan (Stirling, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I rise, like previous speakers, to address the Tax Laws Amendment (Political Contributions and Gifts) Bill 2008. This bill, I think rather strangely, reintroduces measures that have been very recently defeated in the Senate. The coalition, as well as other members of the Senate, opposed these measures in the past because they represent a piecemeal approach to what should be a significant issue facing this parliament—that is, the rather vexed issue of campaign financing. The bill amends the Income Tax Assessment Act 1997 and the Income Tax Assessment Act 1936 to remove tax-deductible status for contributions or gifts to political parties, independent members and independent candidates.

The Senate referred these measures to the Joint Standing Committee on Electoral Matters for investigation and report. That committee has also been asked, as they are after every election, to investigate and consult with the community and stakeholders before providing a report on the whole of the campaign finance system or, in this case, on the whole of the conduct of the election. It has always been the case after every election that the Joint Standing Committee on Electoral Matters scrutinises the conduct of that election and recommends changes to improve our system. This has allowed our system to evolve and it allows us to address changes in the Australian political environment. Australia has one of the world’s oldest and greatest democracies. The system of review that we have established for the conduct of elections has served us extraordinarily well. It is one of the great strengths of our vibrant democracy.

It is a grave mistake to cherry-pick issues outside of that process—like we see with this bill today—particularly one, as I said, about campaign finance, which I think is an issue that warrants more respect and deeper consideration from this parliament. It is ludicrous to introduce this bill, which is aimed at making ill-considered changes to the campaign finance system, without the benefit of allowing the joint standing committee to actually report on the conduct of the election.

The current law affords tax deductibility status for contributions—gifts of money or property—to political parties, independent members and independent candidates to a maximum value of $1,500 in any financial year. These provisions are subject to the conditions of the Commonwealth Electoral Act 1918 and other relevant state or territory legislation. This bill reverses that and allows for no tax deductibility status for political donations.

I want to turn to the heart of what I have to say today, and that is campaign financing. This is an issue that is a great challenge for this House. It is an issue that, if handled badly, could lead to the perception that our great democracy is somehow for sale. I also think that, if it is handled badly, it has the ability to undermine people’s faith in our democratic processes. All members would be aware that there is some cynicism about politics in the community. I think the reality is that there is less cynicism in Australia than there is in some comparable countries. Although cynicism can be healthy, there is a point where it becomes unhealthy. If we do not have our house in order when it comes to how we fund campaigns, we will be giving the public greater cause to have less faith in political processes in Australia—which should actually be celebrated as one of the greatest democracies on the face of the globe.

My views on campaign financing have evolved considerably over the past few years. If you had asked me a couple of years ago, Mr Deputy Speaker, what I thought about campaign financing, I would have said that any limitation on your ability to raise money is an infringement on your rights and your freedom of expression and that that would be a completely unwarranted intrusion from this parliament. But, having watched and, of course, actively participated in the process of campaign fundraising, I have, very reluctantly, formed the view that our system is broken and in dire need of reform—and not reform by piecemeal measures such as this. What we need to do is have a wholesale look at how political parties fund campaigns in Australia. We need to look at how comparable jurisdictions do it. The member for Cook very wisely suggested that we look at the Canadian model. Members will know that the Canadian model arose after significant campaign finance scandals within Canada. I think all members here and political parties generally around Australia have a reluctance to talk about campaign fundraising, and that says something in itself. When we are reluctant to talk about it, we know that there is a problem with it.

Before I go any further down this track I want to make it very clear that I am not coming to this debate from a position of moral superiority. I am not trying to say that I have not been involved in fundraising—of course I have. I have done it extensively, and I will continue to do so until we have wholesale reform of this issue from the parliament. So I am not pretending to be holier than thou; I am not coming into this chamber pretending that I have not participated in fundraising, because of course I have.

I think it is important that the House think about what is in the interests of our democracy. It is clear that political parties need to fund their campaigns, but we need to do it in a way that takes away any perception of conflict of interest. We are very alive to the issue of conflict of interest when it comes to executive responsibilities. For instance, if the Minister for Resources and Energy were to hold even just $500 in a resource company and he were to make a decision that benefited that company, even though most sensible people would say, ‘I’m sure he didn’t make that decision just so he could make $100 or something on his share parcel,’ we all know that that would be considered to be a substantial conflict of interest. But we do not seem to be as concerned about the conflicts of interest that may arise if that resource company paid to sit down with that minister—and I am not singling out that particular minister for any reason; I am just using him as an example—at a lunch or a dinner, and I think this parliament should be.

That is what I find so absurd about this bill. The government have raised this prospect of looking at campaign financing. They said they are concerned about it; they said they want to look into it. Yet the first thing they do is reintroduce this isolated measure into this parliament. They want us to have a look at it in isolation from other campaign funding issues. Like so much about the Rudd government, there remains an enormous gap between their rhetoric and what happens in reality.

There is a green paper process underway into campaign financing. Of course, nothing is truly on the agenda of the Rudd government unless there is a green paper process or some such inquiry. The coalition will be waiting to see what comes out of that process, but I have to confess I do not hold high hopes for it, considering what we see in this bill. What we see is a piecemeal approach when we should see a wholesale approach, an approach to campaign financing that benefits the government at the expense of other political parties or independents in Australia. So we will oppose these measures. We do not believe in this approach. We believe that we should take a holistic approach to campaign finance reform that will truly benefit our democracy.

It is no surprise that public confidence in campaign financing has been severely reduced. I think the member for Cook outlined a good example: the corruption that has occurred in the Wollongong City Council. Instead of addressing the issues that arise from those events, the Labor government believes that it is more important to go after the funding sources of other parties while leaving their own primary source of funding—the union movement—intact.

It is absurd that Mr Rudd and the Labor Party believe that this measure—this rather minimal measure—to reduce tax deductibility is more important than addressing the serious allegations of misconduct and corruption that have led to this loss of confidence in our campaign finance system. I have heard some members—and the previous speaker, the member for Blair, was among them—talking about this measure as a justified savings measure. But those claims were clearly demolished when the Senate looked at this measure. I will not go through those claims again, but they were amply highlighted by the previous coalition speaker, the member for Cook.

The reality is that the measures contained within this bill are drawn straight from the change that was made to the Labor Party’s policy platform at the national convention that was held in 2004. When that resolution was passed, no reference at all was made to revenue savings and its impact on inflation being the driving force behind this policy change. This is a policy that is aimed solely at securing the Labor Party’s advantage over other parties and Independents when it comes to campaign financing.

In contrast with their own policy to undertake wider consultation before introducing tax bills, this very arrogant government have not undertaken any consultation in relation to this bill. The coalition believe that campaign finance reform should be broad ranging and bipartisan in order to protect Australia’s system of democracy—a system that, as I said, is the envy of the world. That is why we have the Joint Standing Committee on Electoral Matters process, a process that has served us incredibly well. We strongly believe that any reforms to campaign finance should be beneficial to our community and should impact equally on all political parties, large and small. In contrast, we have seen that the Rudd government are only interested in campaign finance reform when it benefits their own political ends.

The measures in this bill do not remove any of the deductibility entitlements that relate to how the Labor Party operate the majority of their campaign financing. These measures secure the campaign finance support that the Labor Party receive from the union movement whilst denying funding sources available to other political parties, independent members and independent candidates. During the inquiry by the Joint Standing Committee on Electoral Matters, the committee received a number of submissions. I would like to draw the attention of the House to a particular submission that was made by Professor Graeme Orr of the University of Queensland. He provided the following evidence, which I think is very good advice for the House. He said:

We particularly recommend that deductibility be not abolished altogether until the government and/or JSCEM settles proposals for any revamping of the broader system of political finance.

Other evidence provided to the committee overwhelmingly supported the view that these tax-deductibility measures should not be considered in isolation of other aspects of campaign finance reform. I think it is clear from the measures in this bill that the Labor Party have absolutely no intention of undertaking any serious campaign finance reform that is in Australia’s interests.

The party system is, of course, integral to Australia’s system of democracy. All political parties, along with independent candidates, perform a crucial role within our democratic system. We support campaign finance reform and we support a sensible discussion in this place and the other place on campaign finance reform. We should not be doing this in a piecemeal way; we should be doing it in a wholesale way. Australia’s system of democracy will benefit from us taking that approach, and I would urge all members of this House to protect Australia’s democracy system by opposing this bill and by endorsing an approach that looks in a wholesale way at campaign financing in Australia, so that we can look the Australian people in the eye and know that we have done everything we can to protect our own integrity when it comes to financing our own political campaigns. I urge all members to reject this bill and consider the approach that I have outlined.

See this speech in context